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Transcript: Presidential debate, Oct. 22, 2012 (text, video)

And we've got to make sure that we reduce our deficit. Unfortunately, Governor Romney's plan doesn't do it. We've got to do it in a responsible way by cutting out spending we don't need, but also asking the wealthiest to pay a little bit more. That way we can invest in the research and technology that's always kept us at the cutting edge.

Now, Governor Romney has taken a different approach throughout this campaign. Both at home and abroad, he has proposed wrong and reckless policies. He's praised George Bush as a good economic steward and Dick Cheney as somebody who's — who shows great wisdom and judgment. And taking us back to those kinds of strategies that got us into this mess are not the way that we are going to maintain leadership in the 21st century.

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SCHIEFFER: Governor Romney, "wrong and reckless" policies?

ROMNEY: I've got a policy for the future and agenda for the future. And when it comes to our economy here at home, I know what it takes to create 12 million new jobs and rising take-home pay. And what we've seen over the last four years is something I don't want to see over the next four years.

The president said by now we'd be a 5.4 percent unemployment. We're 9 million jobs short of that. I will get America working again and see rising take-home pay again, and I'll do it with five simple steps. Number one, we are going to have North American energy independence. We're going to do it by taking full advantage of oil, coal, gas, nuclear and our renewables.

Number two, we're going to increase our trade. Trade grows about 12 percent year. It doubles about every — every five or so years. We can do better than that, particularly in Latin America. The opportunities for us in Latin America we have just not taken advantage of fully. As a matter of fact, Latin America's economy is almost as big as the economy of China. We're all focused on China. Latin America is a huge opportunity for us — time zone, language opportunities.

Number three, we're going to have to have training programs that work for our workers and schools that finally put the parents and the teachers and the kids first, and the teachers' unions going to have to go behind.

And then we're going to have to get to a balanced budget. We can't expect entrepreneurs and businesses large and small to take their life savings or their company's money and invest in America if they think we're headed to the road to Greece. And that's where we're going right now unless we finally get off this spending and borrowing binge. And I'll get us on track to a balanced budget.

And finally, number five, we've got to champion small business. Small business is where jobs come from. Two-thirds of our jobs come from small businesses. New business formation is down to the lowest level in 30 years under this administration. I want to bring it back and get back good jobs and rising take-home pay.

OBAMA: Well, let's talk about what we need to compete. First of all, Governor Romney talks about small businesses. But, Governor, when you were in Massachusetts, small businesses development ranked about 48th, I think out of 50 states in Massachusetts, because the policies that you are promoting actually don't help small businesses.

And the way you define small businesses includes folks at the very top. And they include you and me. That's not the kind of small business promotion we need. But let's take an example that we know is going to make a difference in the 21st century and that's our education policy. We didn't have a lot of chance to talk about this in the last debate.

You know, under my leadership, what we've done is reformed education, working with governors, 46 states. We've seen progress and gains in schools that were having a terrible time. And they're starting to finally make progress.

And what I now want to do is to hire more teachers, especially in math and science, because we know that we've fallen behind when it comes to math and science. And those teachers can make a difference.

Now, Governor Romney, when you were asked by teachers whether or not this would help the economy grow, you said this isn't going to help the economy grow.

OBAMA: When you were asked about reduced class sizes, you said class sizes don't make a difference.

But I tell you, if you talk to teachers, they will tell you it does make a difference. And if we've got math teachers who are able to provide the kind of support that they need for our kids, that's what's going to determine whether or not the new businesses are created here. Companies are going to locate here depending on whether we've got the most highly skilled workforce.

And the kinds of budget proposals that you've put forward, when we don't ask either you or me to pay a dime more in terms of reducing the deficit, but instead we slash support for education, that's undermining our long-term competitiveness. That is not good for America's position in the world, and the world notices.

SCHIEFFER: Let me get back to foreign policy.

(CROSSTALK)

SCHIEFFER: Can I just get back...

ROMNEY: Well — well, I need to speak a moment...

SCHIEFFER: OK.

ROMNEY: ... if you'll let me, Bob, just about education...

SCHIEFFER: OK.

ROMNEY: ... because I'm — I'm so proud of the state that I had the chance to be governor of.

We have every two years tests that look at how well our kids are doing. Fourth graders and eighth graders are tested in English and math. While I was governor, I was proud that our fourth graders came out number one of all 50 states in English, and then also in math. And our eighth graders number one in English and also in math. First time one state had been number one in all four measures.

How did we do that? Well, Republicans and Democrats came together on a bipartisan basis to put in place education principles that focused on having great teachers in the classroom.

OBAMA: Ten years earlier...

ROMNEY: And that was — that was — that was what allowed us to become the number one state in the nation.

OBAMA: But that was 10 years before you took office.

(CROSSTALK)

ROMNEY: And then you cut education spending when you came into office.

ROMNEY: The first — the first — the first — and we kept our schools number one in the nation. They're still number one today.

SCHIEFFER: All right.

ROMNEY: And the principles that we put in place, we also gave kids not just a graduation exam that determined whether they were up to the skills needed to — to be able compete, but also if they graduated the quarter of their class, they got a four-year tuition- free ride at any Massachusetts public institution of higher learning.

OBAMA: That happened before you came into office.

SCHIEFFER: Governor...

ROMNEY: That was actually mine, actually, Mr. President. You got that fact wrong.

(CROSSTALK)

SCHIEFFER: Let me get — I want to try to shift it, because we have heard some of this in the other debates.

Governor, you say you want a bigger military. You want a bigger Navy. You don't want to cut defense spending. What I want to ask you — we were talking about financial problems in this country. Where are you going to get the money?

ROMNEY: Well, let's come back and talk about the military, but all the way — all the way through. First of all, I'm going through from the very beginning — we're going to cut about 5 percent of the discretionary budget, excluding military. That's number one.

SCHIEFFER: But can you do this without driving deeper...

(CROSSTALK)

ROMNEHY: The good news is (inaudible). I'd be happy to have you take a look. Come on our website. You look at how we get to a balanced budget within eight to 10 years. We do it by getting — by reducing spending in a whole series of programs. By the way, number one I get rid of is Obamacare.

There are a number of things that sound good, but frankly, we just can't afford them. And that one doesn't sound good and it's not affordable. So I'd get rid of that one from day one. To the extent humanly possible, we get that out. We take program after program that we don't absolutely have to have, and we get rid of them.

Number two, we take some programs that we are doing to keep, like Medicaid, which is a program for the poor; we'll take that healthcare program for the poor and we give it to the states to run because states run these programs more efficiently.

As a governor, I thought please, give me this program. I can run this more efficiently than the federal government and states, by the way, are proving it. States like Arizona, Rhode Island have taken these — these Medicaid dollars; have shown they can run these programs more cost-effectively. I want to do those two things and get this — get this to a balanced budget with eight — eight to 10 years.

But the military — let's get back to the military, though.

(CROSSTALK) SCHIEFFER: That's what I'm trying...

(CROSSTALK)

OBAMA: He should have answered the first question.

OBAMA: Look, Governor Romney's called for $5 trillion of tax cuts that he says he's going to pay for by closing deductions. Now, the math doesn't work, but he continues to claim that he's going to do it. He then wants to spend another $2 trillion on military spending that our military is not asking for.

Now, keep in mind that our military spending has gone up every single year that I've been in office. We spend more on our military than the next 10 countries combined; China, Russia, France, the United Kingdom, you name it. The next 10. And what I did was work with our joint chiefs of staff to think about, what are we going to need in the future to make sure that we are safe?

And that's the budget that we've put forward. But, what you can't do is spend $2 trillion in additional military spending that the military is not asking for, $5 trillion on tax cuts. You say that you're going to pay for it by closing loopholes and deductions, without naming what those loopholes and deductions are. And then somehow you're also going to deal with the deficit that we've already got. The math simply doesn't work. But when it comes to our military, what we have to think about is not, you know just budgets, we've got to think about capabilities.

We need to be thinking about cyber security. We need to be talking about space. That's exactly what our budget does, but it's driven by strategy. It's not driven by politics. It's not driven by members of Congress, and what they would like to see. It's driven by, what are we going to need to keep the American people safe? That's exactly what our budget does, and it also then allows us to reduce our deficit, which is a significant national security concern. Because we've got to make sure that our economy is strong at home so that we can project military power overseas.

ROMNEY: I'm pleased that I've balanced budgets. I was on the world of business for 25 years. If you didn't balance your budget, you went out of business. I went into the Olympics that was out of balance, and we got it on balance, and made a success there. I had the chance to be governor of a state. Four years in a row, Democrats and Republicans came together to balance the budget. We cut taxes 19 times and balanced our budget. The president hasn't balanced a budget yet. I expect to have the opportunity to do so myself.

SCHIEFFER: All right.

ROMNEY: I'm going to be able to balance the budget.

Let's talk about military spending, and that's this.

(CROSSTALK)

SCHIEFFER: Thirty seconds.

ROMNEY: Our Navy is old — excuse me, our Navy is smaller now than at any time since 1917. The Navy said they needed 313 ships to carry out their mission. We're now at under 285. We're headed down to the low 200s if we go through a sequestration. That's unacceptable to me.

I want to make sure that we have the ships that are required by our Navy. Our Air Force is older and smaller than at any time since it was founded in 1947.

Readers' Comments (2)

Mitt knows what he's talking abt. Obama wants us to go thru four more years of joblessness so I can hv all d time In d world to watch his silly debates. What did abc say was capital of new Zealand? Bagdad or Kabul? Well, what did u expect from a network whose name literally means 'simple'?!